Increasing the Profit Margin on Your Life Insurance Sales

 Let’s take a look at how money is made on the sale of life insurance.

The broker or advisor takes responsibility for marketing and managing the sales process. The general agent and carrier take care of prequalification, underwriting, and case management.

In the middle you have the completion of the application paperwork, which of course triggers the underwriting process.

You want the broker or advisor to be front and center with the client, because that’s where the relationship is solidified, and value exchanged. It’s a smart use of the sales person’s time and money to interface with the client as much as possible.

But you certainly don’t want the broker or advisor to be saddled with all the paperwork. This is not a revenue-generating function – it’s simply an expense, and it could be a large one considering the size of some carrier’s application kits, as well as the high volume of supplemental forms.

If the broker or advisor hires an office staff to do the paperwork, it’s still simply an expense, and reduces the profit margin per sale.

Some carriers will take over the application-completion process, on selected products. These tend to be term cases in which the applicants have no serious underwriting challenges. But that neglects a lot of other products that are sold, especially with impaired risk cases.

To me, the best solution is for the master general agent to take over on this function. Let them worry about maintaining a staff ready, willing, and able to complete paperwork for case after case. Let them shoulder the expense involved. This way, the cost per sale can be kept as low as possible, and therefore the profit per sale can be kept as high as possible.

Of course, the MGA must be large enough to support this overhead, and run efficiently enough to deliver top-notch service on every application. Through our Global Insurance Portal, we can help you form a partnership with one who will take care of this function on the vast majority of your life insurance cases. Please contact me for details.

Our friend and colleague George Bailey runs a radio show that is committed to financial education for children. This is a truly noble mission because nothing is more important than giving the next generation the proper values and mindset for financial success.

George was kind enough to interview me recently. We talked about my own childhood and career, and the message I would like to send to upcoming consumers of financial products. He conducted a very professional interview, and we both enjoyed it immensely. I think you will too. Here’s the link:


Want to learn more?
Read my free guide, How To Get Great Life Insurance Rates and learn how you can get life insurance companies to compete for your business, at no risk or extra cost.